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#49014 - 12/16/02 06:43 PM Interest on HELOC
Anonymous
Unregistered

I reviewed a loan that I am sure we made a mistake on, but the dept. doesn't agree.

We closed the first and the HELOC on the same day - part of the HELOC went to help payoff the original first so that the borrower's would not have to keep paying PMI. The equity dept. started charging interest on the HELOC back to the date of when the borrowers signed rather than after the deed was recorded and the loan was funded. The difference in days is significant - 8.

One reason I say this is wrong is because Calif. Civil Code 2948.5 says you can't start charging the borrower interest until either one day prior to recording if there's an escrow or on the date funds are available for withdrawal if there is no escrow.

Agree or am I off base somehow?

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#49015 - 12/16/02 08:00 PM Re: Interest on HELOC
Don_Narup Offline

Power Poster
Joined: Jul 2001
Posts: 3,708
Las Vegas Nevada
Ask the department how they justify charging interest on funds not disbursed.

I agree with you
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#49016 - 12/17/02 05:12 PM Re: Interest on HELOC
Miss Kitty Offline
Platinum Poster
Joined: Mar 2002
Posts: 721
California
I agree with you - boy the auditors will have a field day on this one...

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#49017 - 12/17/02 10:56 PM Re: Interest on HELOC
SJB Offline
Diamond Poster
SJB
Joined: Jun 2002
Posts: 1,210
California
Wow - I'd calculate that refund and take care of it now!
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#49018 - 12/26/02 06:00 PM Re: Interest on HELOC
Al Miller Offline
Diamond Poster
Al Miller
Joined: Oct 2000
Posts: 2,416
Pleasanton CA USA
From the In Brief section of the American Banker on 12/23:

"The CA Department of Corporations Friday said it filed a lawsuit against Long Beach Mortgage Co., a unit of WaMu, seeking $9 million in civil penalties.

'The state said it discovered during a 1999 examination that Long Beach had overcharged borrowers by initiating interest rate charges more than one day before the loans closed, violating a state law that says lenders may begin charging interest only within 24 hours of closing."

Will we see your bank name here next, Anonymous?
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Al Miller, CRCM
Opinions expressed are my own and not necessarily shared by my employer.

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#49019 - 12/28/02 01:38 PM Re: Interest on HELOC
Anonymous
Unregistered

Where can I find a copy of Calif. Civil Code 2948.5 online?

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#49020 - 12/30/02 03:31 PM Re: Interest on HELOC
CalifDreamin Offline
Diamond Poster
CalifDreamin
Joined: Mar 2002
Posts: 2,213
Far from Calif
You can find it right here.
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#49021 - 12/30/02 03:34 PM Re: Interest on HELOC
Al Miller Offline
Diamond Poster
Al Miller
Joined: Oct 2000
Posts: 2,416
Pleasanton CA USA
Go to:

http://www.leginfo.ca.gov/calaw.html

Mark the Civil Code and search. That will bring up a table of contents. Select the range and you will get a text file. It will probably include some sections before and after, but usually only be a few pages.
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Al Miller, CRCM
Opinions expressed are my own and not necessarily shared by my employer.

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